The Supreme Court has determined that its 2024 order permitting the Union of India to seek a review in Benami Act matters decided on the basis of the earlier Ganpati Dealcom judgment was flawed. The Court clarified that the mere overruling of a precedent does not automatically provide a ground to review every case that applied it. The root of the dispute lies in a review petition filed by the Union of India challenging the Supreme Court’s 2022 judgment in Union of India v. Ganpati Dealcom Pvt. Ltd. In that earlier three-judge Bench decision, the Court had addressed only the limited question of whether the 2016 amendment to the Prohibition of Benami Property Transactions Act should be applied prospectively or retrospectively. Despite that narrow framing, the Court went further and declared Section 3(2) of the unamended 1988 Act unconstitutional as “manifestly arbitrary” and violative of the constitutional protection against ex post facto criminal laws under Article 20(1), and struck down Section 5 of the unamended Act.
In reviewing that decision, the Court observed that in the original Ganpati Dealcom case there was no genuine adversarial contest on the constitutional validity of the unamended provisions. Neither party had raised a proper challenge to Sections 3 or 5 of the pre-2016 Benami Act, and the Court emphasized that judicial determination of constitutional validity requires a “lis” — a real dispute — between parties on the issue. Without such a contest, the Court said, it was procedurally inappropriate for the earlier Bench to declare those unamended provisions unconstitutional.
Because of this procedural lapse, the Court allowed the Union’s review petition, recalled its 2022 judgment, and restored the appeal for fresh consideration before a differently constituted Bench. Alongside that, the Court granted a remedial mechanism for other litigants: any party whose case had been disposed of by relying on the now-recalled Ganpati Dealcom judgment was given the liberty to file review petitions in their own proceedings on account of the present ruling.
However, the Court drew a clear boundary: it rejected the idea that simply because the precedent was overruled, all cases that applied it can be mechanically reopened. The Court held that the proper course is for individual parties to initiate review in their own matters rather than treating the overruling as an automatic ground across the board. This distinction was underlined to prevent open-ended relitigation and to respect the limits of review jurisdiction.
In its judgment, the Court underscored the importance of procedural propriety in constitutional adjudication, noting that a challenge to the validity of a statutory provision cannot be entertained in the absence of a real dispute on that provision. By recalling the earlier ruling, the Court did not resolve the underlying constitutional questions itself but instead sent the matter back for a full and proper hearing. Through this ruling, the Court reaffirmed that the mere fact of a precedent being overruled is not by itself a justification for reopening every decision based on it; each case must be assessed on its own merits through the review mechanism.
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